Friday, 2 February 2018


Someone has definitely prodded the bear and he’s out and about, rolling boulders and uprooting shrubs looking for the value that the equity market valuations promise. President Trump’s holiday on Wall Street is ending and the bill has been slid under the door of the honeymoon suite. US bond yields are at a 4 year high. Commodity prices are pushing higher. There is some evidence of a mistrust of “synthetic” instruments. These are the sometimes-complicated securities manufactured by the propeller heads to amplify the modest price moves of the underlying conventional shares or commodities.  Sleep with one eye open, folks.
The ease with which a hitherto unknown outfit like Viceroy can sow widespread doubt about listed companies is very interesting. It’s not unlike what’s happening in the Bitcoin market where in the absence of any recognised method for valuing these intangible beasties, just about any number seems to do. In the case of a listed company like Capitec Bank, however, there are published numbers and common methodologies. Nevertheless, banks are notoriously difficult entities on which to carry out a financial analysis as they can legally (perhaps) shift and rename troves of value and pockets of impairment (a polite term for dud loans) from one reporting period to the next. A few years ago, one of the big four banks sent shareholders an annual report weighing more than kilogram. Plenty of hidey-holes in that document to stash some skeletons.
Whether or not Viceroy have uncovered some moth-eaten donkeys in the Capitec stable of thoroughbreds will emerge for those of us on the outside (customers and shareholders) in due course. In the meantime, the sheriff is charging around firing into the air and threatening insiders with a plot on boot hill. He has little chance of success.
Multichoice, the privately-owned satellite digital broadcast system has told ANN7 that it will from August no longer provide them with a channel. Given the many strange TV stations that it does already broadcast to much of Africa and that this rather suspect and partisan news station is (in a roundabout way) owned by pals of Number One, it is safe to suggest that Multichoice’s decision is not entirely a commercial one.  If the government had only carried out its international obligation two years ago to have in place a publicly owned terrestrial digital broadcast  system,  then ANN7 would now have an alternative method for reaching its meagre audience of cabinet ministers eager to see themselves on TV.
Dismissed or suspended senior staff members at state owned enterprises often challenge their suspension or dismissal with such zeal that it suggests either that they really are not guilty or  that they know how tough it will be no longer to have a highly paid job with opportunities for patronage. Mind you its astonishing how often a dismissed and disgraced cadre, finally deemed unqualified, incompetent or sufficiently corrupt by one branch of government pops up in another. Diplomatic posting as ambassador to a country commercially important to us is a frequent reward.
SARS, the nation’s tax collector, is so desperate for funds that it appears to be on the point of stirring up a whole heap of trouble. It wants to have a close look at whether all the hundreds of churches in the country are being totally honest about their tax affairs. SARS too must have been intrigued by the sight of a humble rural pastor sliding out from behind the wheel of a Lamborghini. The heart of the problem is that religious institutions can apply to be exempted from various taxes and fiddling with that piece of legislation is going to face fierce opposition. Just defining such an institution is a several thousand-year-old problem.
The Proteas were handed a drubbing by India in the first ODI of a lengthy series. We didn’t look too clever in the third test either. It’s a funny game, cricket. This is going to be a tough summer if we have to watch more of this in the coming weeks. Already, however, the captain is telling everyone that he is focussing on the World Cup next year!
James Greener
Friday 2nd February 2108